Investment Must-Knows

You Can’t Beat The Market If You Are The Market

For maximum value, ensure you’ve read this article first: Some Stocks Are Not All Stocks – A Quick Investment Education on Style Boxes

Consider this: Every billionaire in the world got rich on one company’s stock. The one they ran. Yet we’re told we need 10,000? It makes no sense yet we all do it like sheeple.

Obviously one stock is very risky so the goal is to find a reasonable amount of funds and stocks with a person that is skillful. This should be carefully assessed along with the person’s age, wealth, risk tolerance, time horizon and other typical risk management factors.

Remember, all of the organizational constructs we know have been built by someone. That person or company may be fallible, conflicted, biased, Rich even- and the construct may include flaws, intentional or not.

Someone, maybe you, could argue not all investments should go up at once and that you want assets that are not correlated.

I saw that argument this morning from a Reformed Broker blog. But do you want to own companies that are circling the drain or headed for bankruptcy, losing revenue year after year because their business model isn’t working anymore? No. Of course not!

Yet, you likely own them if you own index funds, or mutual funds that are indexed, or made up mostly of stock market index components.

As of December 31, 2017, according to a Thompson Reuters stock screen we ran on S&P 500 companies here were the 10 worst performers:

Spoiler Alert: You own all of this if you own the S&P 500 index.

They don’t seem like a bad group of companies. They’re certainly big names. But many of you know that you’ve seen Macy’s (#16 worst -29%) closing stores this year and when that happens, and revenues go down repeatedly it’s can be a sign of pending bankruptcy.

You likely would not hold that company in your personal account for long, but you do in your funds! Fun. If you like pain.

Here are the best performers in the S&P 500 last year:

Here were 2017’s best performers that are not in the S&P 500 Index:

The stock market depending upon which index you look at, S&P 500 or DJIA or any other measure was up 20 to 25% this year.

Many articles will say stocks were up 20% this year it was a great year. Which it was, this is true. But lost in the truth is the fact that:

  • many stocks were up way more than that and you could have owned some of them,
  • some way less of course
  • and many were way down.

In a great year!

If you’re engaged in Style Box investing, you’re with the market, which is up. Great. But if you had taken a more mindful approach, (or hire someone who does) you could also have had the opportunity to take advantage of some the stocks that were way up, and in theory, potentially steer clear of some of the stocks that were going down.

Some stocks are clearly not all stocks and all stocks are not some stocks.

If you’re a client, you know us. We endeavor to find better in everything we do.

It’s up to the rest of the people to decide, do they want to employ or pay for continued attempts at only average − or not?

Most investors accept average investment performance when they wouldn’t accept average in any other area of their life. With investing you’re not forced to be average. You’ve only been brainwashed into thinking this is all that’s possible, and therefore all you deserve.

Investors just don’t know that’s exactly what’s happening and that’s where we can help.

The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual. All indices are unmanaged and may not be invested into directly. Investing in mutual funds, stocks and index funds involves risk, including possible loss of principal. The Standard & Poor's 500 Index is a capitalization weighted index of 500 stocks designed to measure performance of the broad domestic economy through changes in the aggregate market value of 500 stocks representing all major industries. The Dow Jones Industrial Average is comprised of 30 stocks that are major factors in their industries and widely held by individuals and institutional investors.

Article Tracking Number 1-711203

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